KPMG recently issued its 2022 CEO Outlook, which asked more than 1,300 CEOs at the world’s largest businesses about their strategies and outlook. This has revealed that 58 percent of leaders expect a recession to be mild and short. Fourteen percent of senior executives identify a recession among the most pressing concerns today — up slightly from early 2022 (9 percent), while pandemic fatigue tops the list (15 percent).
Over the next year, more than 8 out of 10 (86 percent) global CEOs anticipate a recession to hit, with 71 percent predicting it will impact company earnings by up to 10 percent. A strong majority of senior executives believe that a recession will disrupt anticipated growth (73 percent). However, three-quarters (76 percent) have already taken precautionary steps ahead of a looming recession.
Despite those concerns, senior executives also feel markedly more confident about the resilience of the economy over the next 6 months (73 percent) than they did in February (60 percent), when KPMG surveyed 500 CEOs for its CEO Outlook Pulse survey. Further, 71 percent of leaders are confident about the global economy's growth prospects over the next 3 years (up from 60 percent in early 2022) and nearly 9 in 10 (85 percent) are confident about their organization’s growth over the next 3 years.
There is an elevated level of similarity between the findings identified at the global level with the trends which are currently observed in the Romanian economy. In the first half of the year the Romanian economy advanced by 5.8%, well above initial expectations. Moreover, recent local business sentiment indices show that businesses feel, on average, rather positive about very short-term future economic conditions. This, despite the continuing geopolitical uncertainty, primarily caused by the war in Ukraine, the rapid increase in energy prices and the rise in interest rates, as a consequence of higher inflation.
Labour market perspectives follow those on economic activity prospects. The unemployment rate has been falling and has now reached its pre-pandemic levels, standing at 5.1% in August. This has exacerbated some issues pertaining to the labour market. Shortages of labour supply, talent and the skills mismatch have been felt more markedly across several sectors lately, including manufacturing and services. Local businesses often refer to these factors as being a challenge for their expansion plans. Employment tendencies in the near term are mostly neutral although some are positive, notably in retail and transport sectors where employment needs are marginally higher.
Investments in technology are emerging as supporting a consolidated trend. Funds for investment that would aid the digitalisation of businesses, for instance, are available via the Recovery and Resilience Facility over the next years. At the national level spending on information and communication technologies has already increased substantially over the last years, a trend that has accelerated during the pandemic. If in 2019 the sector accounted for around 10% of Romania’s GDP growth, this has risen constantly since then, reaching 13.6% in 2021 and an impressive 29% in the second half of 2022. This points towards the increased attention businesses pay to investments in technology as a means of improving both their productivity and customer experience.
